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The grant of one of two bona fide and mutually exclusive certificate of need applications for administrative approval without a hearing on both deprives the loser of the hearing to which he is entitled and constitutes a material error in procedure.
In March of 1988 both appellant Sarasota County Public Hospital Board d/b/a Memorial Hospital and appellee HCA Doctors Hospital filed certificate of need applications to construct acute care hospitals providing similar services within close proximity to each other. Neither application proposed the addition of beds above licensed capacity, rather, appellee Hospital proposed to construct a completely new replacement of its existing physical plant at a different location. Appellant hospital proposed to construct a satellite hospital by transferring beds from its main physical plant. Appellee Department of Health and Rehabilitative Services received both applications in the same reviewing cycle but it did not comparatively review the applications because it was of the opinion that the appellee hospital was reviewable as a capital expenditure and appellant hospital was reviewable as an additional health care facility. Appellee issued notices of intent to approve appellee hospital’s application and to deny appellant’s application. Appellant contested appellee’s decisions in a petition for a formal administrative hearing. Appellee hospital moved to dismiss appellant’s petition. After conducting a hearing on appellee hospital’s motion to dismiss, the hearing officer issued an order in which he recommended that the motion be granted for the reasons asserted therein by appellee hospital. Appellee department adopted the hearing officer's recommended order in its final order dismissing appellant’s challenge to the appellee hospital's application for lack of standing.
Did the appellee department err in adopting the recommended order dismissing appellant hospital’s challenge to appellee hospital’s application for lack of standing?
The court reversed the judgment of appellee department because the court found that a material error in procedure occurred in the case. The case was likewise remanded with directions that appellant hospital’s petition for a formal administrative hearing to comparatively review the parties' certificate of need applications be granted. The court, however, noted that a determination was made, at least in part, in accordance with a quantitative standard. A determination made in that manner indicated that the applications were mutually exclusive and were required to be comparatively reviewed. The court concluded that the fundamental doctrine of fair play was applicable because there was some comparison of appellee hospital's application during review of appellant's application. Fairness dictated that appellant have the opportunity to be heard at the same time as appellee hospital.